Not your father’s farm

District farms are getting smaller and bigger at the same time

Untitled Document
The long-term trend in American agriculture has been
consolidation—larger farms worked by fewer farmers. In 1930, a
quarter of the U.S. population lived on farms; today only about 2
percent do. Technological advances that encourage economies of scale,
as well as other factors such as the growth of job opportunities in
other industries, have caused this sea change.

Recently released data from the 2007 Census of Agriculture appear, at
least on the surface, to tell a different story. According to U.S.
Department of Agriculture figures, the number of farms increased 4
percent nationwide compared to the previous census five years
earlier. The farm count grew in 39 states, including almost every
state in the Ninth District.

In a press release the USDA said that the new census "indicates a
leveling" of the decades-long decline in the number of farms—cause
for optimism for those dismayed by the plight of the family farmer.

However, a closer look at the data shows that the historic pattern
persists. The number of very large farms has increased, while the
decline in medium-sized, family-run operations has continued
unabated. In many parts of the district and nation, they are giving
way to increasing numbers of small holdings, often dubbed "hobby"
farms.

Families are still farming, but they have more in common with the
folks in Green Acres than those in Little House on the Prairie.

The incredible
shrinking farm

Two main findings—a surge in the number of farms and a commensurate
drop in average farm size—jump out from the ag census data. Between
2002 and 2007 the number of farm operations increased in every
district state except South Dakota (see Chart 1). County-level data
in the census show that the number of farms increased in 173 out of
303 district counties. While that leaves dozens of counties where
operations fell in number—due to urbanization and farm
consolidation—the percentage decreases in these counties were
generally smaller than the proportional increases in counties where
farm numbers rose.

Over the same period the acreage of farmland mostly decreased or
stayed constant in district states (see Chart 2). Urban areas have
continued to expand, consuming surrounding farmland. Farm acreage
increased slightly in Montana and North Dakota, largely due to
greater cultivation of marginal land because of high crop prices in
2007. Nationally, farm acreage declined more than 3 percent.

More farms and static or decreasing farm acreage implies that, on
average, farms are getting smaller. This is the case for every
district state except, once again, South Dakota. In many areas the
proliferation of hobby farms—properties classified by the USDA as
"retirement" or "residential/lifestyle" operations—is shrinking
average farm size. The owners of these farms are either retired or
earning most of their income in nonfarming occupations. While these
properties make up almost 60 percent of U.S. farms, they account for
less than 10 percent of agricultural sales.

A good example of the spread of hobby farms is the eastern Upper
Peninsula of Michigan, where despite the region's thin soils and
frigid climate, some counties have seen 20 percent or higher
increases in farm numbers. The number of farms in Luce County, Mich.,
increased from 30 in 2002 to 41 in 2007. Many of the new farmers are
former residents of nearby U.P. cities like Sault Ste. Marie or urban
centers in the Lower Peninsula who are more interested in a rural
lifestyle than commercial farming.

"Most of those are probably small and part-time farmers—people moving
out from the city and buying a 40- or 10- or 20-acre plot and then
doing farming on the side," said Warren Schauer, a Michigan State
University extension educator based in Escanaba. Counties farther
west in the U.P. are apparently in less demand for hobby farming;
there the number of farms mostly fell or held steady.

Instead of potatoes, hay and dairy products—the primary output of
commercial farms in the U.P.—many of these small farms produce food
for personal consumption or for sales at farmers markets and
specialty shops.

Similar patterns of rising farm numbers can be seen in other district
counties near urban or recreation areas. In Rice County, Minn., near
the Twin Cities, the number of farms increased 15 percent, while
acres per farm decreased 12 percent. In Montana, the state with the
district's biggest percentage rise in farm numbers, Glacier County
near Glacier National Park saw a 32 percent increase in farm
operations and a 22 percent drop in average acres.

An analysis of farm income in district counties supports the
presumption that operations formed in the past five years are
predominantly small farms with relatively low output. Although farm
income increased overall, it grew significantly less in counties
where farm numbers increased.

Feeling the squeeze

While it appears that most newer farms are smaller, many large-scale
operations in the district are growing even larger. In many counties
big operations have absorbed smaller ones in recent years, creating
fewer, more expansive farms with over $250,000 in annual sales.

Across the district, the biggest farms account for a greater share of
agricultural output today than in the past. In Montana the top 13
percent of farms measured by sales produced three-quarters of the
state's agricultural output in 2007. Ten years earlier that share of
farm sales was spread over the top 20 percent of operations by sales.
Compared to the district, national farm output is even more
concentrated at the top.

The number of medium-sized family farms that fills the gap between
factory operations and hobby farms has been falling for years, and
the latest census shows that they continue to fade away. "It's
actually a bimodal change; we're seeing growth in the big and the
small at the expense of those in between," said Richard Rathge, a
rural demographer at North Dakota State University.

Take North Dakota, for example. Between 1997 and 2007, the number of
farms under 180 acres in size increased by nearly a third and the
number exceeding 2,000 acres increased 7 percent. In the same period
the ranks of farms between 500 and 2,000 acres—the size of a typical
commercial family farm in the Dakotas, Rathge said—shrank by more
than one-quarter.

In Minnesota the number of 2,000-plus acre farms increased even more,
by 18 percent. The pattern is especially evident at the county level;
in many areas, such as the sparsely populated southwest, farms became
larger and less numerous.

Despite a statewide decline in the number of farms and increasing
average farm size in South Dakota—counter to the trends in the rest
of the district—there was no reprieve for medium-sized farms in the
state. The number of operations between 500 and 2,000 acres in size
fell almost 14 percent, reducing the total number of farms even as
the number of large and small operations grew.

The latest ag census numbers show, as the USDA stated in its press
release, a break with the past: Nationally and in most district
states, the number of farms is increasing. The long-term effects on
agricultural production and rural communities of an influx of
small-scale farmers who don't fit the traditional farming mold
remains to be seen. Less dependent on the land for a living than the
archetypal family farmer, they produce an array of food products that
are difficult to categorize and quantify.

However, the overarching historic trend in agriculture hasn't
changed; among commercial farms that produce the bulk of the nation's
food, farms on average are getting bigger and fewer.